Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 34

Calculate gross profit ratio and cost of goods sold Refer to the consolidated statements of income on page 687 of the Intel Corporation annual report in the appendix.

Required:

a. Calculate the gross profit ratio for each of the past three years.

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b. Assume that Intel’s net revenues for the first four months of 2009 totaled $12.6 billion. Calculate an estimated cost of goods sold and gross profit for the four months.

Step 1 of 3

Compute Gross profit ratio and COGS

Gross profit ratio: The gross profit ratio deals with the difference between costs to produce product and amount for which this product is selling for. The formula for calculating the gross profit ratio is

Note: Data are extracted from page 687 of this textbook as referred to the annual report of Intel Corporation. For part solution, the net revenue for the first four months of 2009 is $12.6 billion.